3 Oct 2017

Retailers face tough Christmas

Business sentiment remains flat moving into the final quarter of 2017, despite an uptick in mid-year trading. In Dun & Bradstreet’s September Business
Expectations Survey companies are predicting weaker sales, lower employment and a decline in selling prices; however, profits and capital
investment are tipped to rise in the last months of the year. The upcoming Christmas period has done little to lift spirits in the troubled Retail sector, with
expectations uncharacteristically low for the December quarter.

"As 2017 draws to a close, business expectations remain broadly steady, which points to ongoing moderate economic growth. Actual business activity ticked higher
in the June quarter, but it remains in a range that points to the economy neither being strong nor weak, but rather something in between."Stephen Koukoulas, Dun & Bradstreet Economic Adviser

Retailers, Manufacturers downbeat

Sentiments within the Retail sector remain subdued: while expectations have ticked upward for the fourth quarter compared to the third quarter, the current result
is substantially lower than prior corresponding quarters.

Business Expectations Index

Retailers are the least upbeat about business growth across all sectors: 55.4 percent of retail firms said they were more optimistic about business growth in the
year ahead compared to the previous year, while 35.7 percent are less optimistic. Wholesalers are the most upbeat, with 69.8 percent feeling more optimistic compared
to 20.8 percent feeling less optimistic.

Meanwhile, Manufacturing firms saw a notable drop-off in optimism in the September survey, with Q4 sales, profits and capital investment expectations falling to
multi-year lows.

"Business expectations in manufacturing have taken a sharp turn lower, which appears to be linked to the recent strength in the Australian dollar which is
undermining the sector’s international competitiveness. Indeed, manufacturing is poised for a period of severe weakness with expected profits, sales and capital
expenditure at the lowest level in at least four years."Stephen Koukoulas, Dun & Bradstreet Economic Adviser

During the third quarter, manufacturers were the most likely of all sectors to say their business would benefit if the Australian dollar was lower than the current
level: 17.6 percent of Manufacturing businesses would prefer a lower dollar, compared to an average of 9.7 percent across all sectors.

Established in 1887, Dun & Bradstreet is Australia and New Zealand's longest-established credit information bureau. Backed by its extensive database, Dun & Bradstreet helps businesses to make informed credit decisions, and consumers to access personal credit information. Dun & Bradstreet works across the entire credit lifecycle to deliver data-driven solutions in sales and marketing, credit reporting and debt management. Through analysis of financial and behavioural information, Dun & Bradstreet also provides current and predictive assessments of the economy, business conditions and credit activity.